BILL NUMBER: SJR 1	CHAPTERED  07/16/99

	RESOLUTION CHAPTER   63
	FILED WITH SECRETARY OF STATE   JULY 16, 1999
	ADOPTED IN SENATE   JULY 8, 1999
	ADOPTED IN ASSEMBLY   JUNE 24, 1999
	AMENDED IN ASSEMBLY   JUNE 24, 1999

INTRODUCED BY   Senator Speier
   (Coauthors:  Assembly Members Aanestad, Alquist, Aroner, Bock,
Calderon, Cardenas, Cardoza, Cedillo, Corbett, Correa, Cox, Cunneen,
Davis, Ducheny, Dutra, Florez, Frusetta, Granlund, Havice, Hertzberg,
Honda, Jackson, Keeley, Knox, Kuehl, Lempert, Longville, Lowenthal,
Machado, Maldonado, Mazzoni, Migden, Nakano, Papan, Pescetti, Reyes,
Romero, Scott, Shelley, Soto, Steinberg, Strom-Martin, Thomson,
Torlakson, Vincent, Villaraigosa, Washington, Wayne, Wesson, Wiggins,
Wildman, and Zettel)

                        DECEMBER 16, 1998

   Senate Joint Resolution No. 1--Relative to Medicare.


	LEGISLATIVE COUNSEL'S DIGEST


   SJR 1, Speier.  Medicare coverage.
   This measure would memorialize the federal government to take
steps to ensure that persons abandoned by Medicare HMOs have access
to other HMOs or Medigap policies and to rescind the determination
that disabled persons under 65 years of age enrolled in HMOs do not
have the same rights as other Medicare enrollees, and would
memorialize the President to issue an Executive order directing his
administration to work closely and coordinate with California and
other states to guide and assist Medicare enrollees who are abandoned
by their HMOs to obtain new Medicare coverage.




   WHEREAS, Many health maintenance organizations (HMOs) have thrown
the Medicare system into a state of turmoil by withdrawing coverage
of Medicare enrollees at the end of 1998; and
   WHEREAS, Thousands of HMO patients in California are now in a
state of panic and confusion regarding their future ability to access
health care services, including pharmacy benefits, at a reasonable
cost; and
   WHEREAS, In California, 39 percent of Medicare enrollees, or
approximately 1.5 million patients, are served by HMOs, more than
double the national average; and
   WHEREAS, In recent years, HMOs have aggressively and successfully
recruited the elderly into their Medicare health plans with promises
to provide more benefits than standard fee-for-service Medicare
coverage, including allowances for prescription drugs, hearing aids,
and eyeglasses; and
   WHEREAS, Each year HMOs participating in the Medicare managed care
program are required to notify the federal Health Care Financing
Administration (HCFA) whether they will renew their contracts for the
following year; and
   WHEREAS, This year, numerous HMOs have notified HCFA that they
will not renew their contracts for next year, or will reduce the
areas that they currently serve, with these withdrawals and service
area reductions adversely affecting more than 400,000 beneficiaries
across the nation, and over 40,000 Medicare patients in California;
and
   WHEREAS, The Inspector General of the United States Department of
Health and Human Services has discovered that HMOs have been
receiving more than $1 billion annually in overpayments from the
Medicare Trust Fund, because HMOs are inflating administration costs
dedicated to marketing, executive salaries and fringe benefits, legal
fees, and other overhead costs; and
   WHEREAS, The inspector general has recommended that these funds be
recovered from HMOs and dedicated to providing Medicare
beneficiaries with added health benefits, including prescription
drugs; and
   WHEREAS, Many Medicare patients not served by HMOs purchase
Medicare supplement insurance, also known as Medigap coverage, which
fills in the gaps in Medicare coverage and offers patients the most
flexibility in choosing doctors and hospitals, and premiums for
Medigap insurance have increased, on average, 35 percent since 1994;
and
   WHEREAS, Under the federal Balanced Budget Act of 1997, seniors
enrolled in a Medicare HMO that terminates its services are eligible
to purchase specified Medigap insurance coverage, regardless of their
health status, but the last day to take advantage of this guaranteed
access is March 4, 1999; and
   WHEREAS, Disabled individuals who qualify for Medicare, but are
younger than 65 years of age, are not guaranteed access to Medigap
coverage under a federal interpretation of federal law, and will need
special assistance to secure health care services after they are
abandoned by their HMOs; now, therefore, be it
   Resolved by the Senate and Assembly of the State of California,
jointly, That the Legislature respectfully memorializes the federal
government to take immediate and appropriate steps to ensure that
persons abandoned by Medicare HMOs have access to other HMO or
Medigap policies that cover prescription drugs and to establish
stopgap measures to ensure that HMOs do not further restrict coverage
areas or benefits until the larger issue of the Medicare HMO payment
mechanism is further examined or refined; and be it further
   Resolved, That the Legislature respectfully memorializes the
federal government to rescind its determination that disabled persons
under 65 years of age enrolled in HMOs do not have the same
guaranteed rights to Medigap policies as all other Medicare
enrollees; and be it further
   Resolved, That the Legislature respectfully memorializes the
President of the United States to issue an Executive order directing
his administration to work closely and coordinate with California and
other states to guide and assist Medicare enrollees who are
abandoned by their HMOs to find new Medicare coverage, either in the
form of another HMO that serves the abandoned region, or through
Medigap coverage, until appropriate federal legislation is enacted to
address permanently these types of dislocations that adversely
affect Medicare patients; and be it further
   Resolved, That the Secretary of the Senate transmit copies of this
resolution to the President and Vice President of the United States,
the Speaker of the House of Representatives, the majority leader of
the Senate, each Senator and Representative from California in the
Congress of the United States, the Secretary of Health and Human
Services, and the Administrator of the Health Care Financing
Administration.
